September 20, 2021

Volume XI, Number 263

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September 20, 2021

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September 17, 2021

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California Mandates Diversity Quotas for Corporate Boards

On September 30, 2020, Gov. Newsom signed Assembly Bill 979 (“AB 979”) into law.  The new statute, which adds section 301.4 to the Corporations Code, is aimed at increasing representation from communities of color and the LGBT community on the boards of publicly traded companies.  The law follows in the footsteps of earlier legislation that required publicly traded corporations in California to hit certain gender targets on their boards.

AB 979 applies to publicly held domestic or foreign corporations whose principal executive offices are located in California, according to the companies’ filings with the U.S. Securities and Exchange Commission.  The law requires that covered corporations have at least one director from an “underrepresented community” on their board by the close of calendar year 2021; it sets further targets for board membership by the close of the 2022 calendar year, depending on total board size.  AB 979 defines a “director from an underrepresented community” as a director who self-identifies as “Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.”

And, AB 979 has teeth:  It empowers the Secretary of State to impose fines on corporations that fail to comply—ranging from $100,000 to $300,000.  AB 979 also requires that the Secretary of State post annual reports on its website listing, among other information, the number of corporations that are in compliance with the new requirements as well as information regarding those corporations that either moved their headquarters to California or out of it.

© 2021 Proskauer Rose LLP. National Law Review, Volume X, Number 279
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About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm
Partner

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

310-284-5690
Phillipe Lebel labor & Employment Attorney Los Angeles Proskauer Law Firm
Associate

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, whistleblower, trade secrets, and breach of contract litigation, in both the single-plaintiff and class-action context, at both the trial and appellate level, and before administrative agencies. Phil also represents employers in connection with labor law matters, such as labor arbitrations and proceedings before the National Labor Relations Board. Additionally, Phil counsels clients to ensure compliance with federal...

+1.310.284.4558
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